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Following a positive presentation by Nykaa's management, represented by Anchit Nayar (CEO, Beauty E-commerce) and Namrata Penta (AVP, M&A & IR), brokerage house Jefferies has reiterated its ‘buy’ call on (Nykaa) with a target price of 220, implying an almost 28 percent upside. Jefferies has projected that Nykaa could achieve a compound annual growth rate (CAGR) of approximately 20 percent between FY24 and FY27. In its bull case scenario, growth could reach 25 percent, while in the bear case, it may dip to 15 percent over the same period, said the brokerage.

Furthermore, the brokerage sees Nykaa's target price at 250 (45 percent upside) in the bull case scenario and at 130 (24.5 percent downside) in the bear case scenario. "Nykaa has been able to carve out a niche for itself through its focus on BPC, which differentiates it from horizontals (Flipkart and Amazon).



In recent years, there has been a surge in the number of customers transacting for the company. Nykaa should benefit from the increasing order frequencies and basket values, as the newer customer cohorts mature. We expect Nykaa to remain in a hyper-growth phase in the medium term as online BPC and fashion penetration ramp up," said the brokerage explaining its positive view.

According to Jefferies, in the base case scenario, Nykaa anticipates a gradual increase in order frequency as its customer base matures. The brokerage firm also projects that the gross merchandise value (GMV) for both the beauty and personal c.

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